Hobart rents the second most unaffordable out of Australian cities

An analysis of the state’s rental market has found that one quarter of Tasmanians on low incomes are experiencing housing stress.

A report by Shelter Tas found that 14,600 households struggle to pay their rents which the peak housing body says is rising up the income ladder and impacting more working households.

Shelter Tas executive officer Pattie Chugg said while Tasmania had low rents compared to other states, this should be taken in the context of the state’s lower wages.

“The more households have to pay on rent, the less they have to put towards other essential items, which leads people to make very cruel choices,” Ms Chugg said.

“Increasing housing stress impacts on labour force participation and reduces the productivity of our economy.”

According to the body’s Rental Affordability Index released on Wednesday, regional Tasmanian households would be paying 25 per cent of its income in rent.

Housing stress kicks in when a household spends 30 per cent of its income on a mortgage or rent.

In greater Hobart, affordability had decreased compared to six months ago.

The report acknowledged that an average household would find renting in Hobart too expensive, saying it remained the second least affordable metropolitan area in the country.

“In such a competitive and unaffordable rental market, lower income households are being forced out of the inner city into outer areas where there are fewer jobs and poor transport options, thus entrenching their disadvantage,” Ms Chugg said.

She said Shelter Tas wanted to see a $60 million windfall in stamp duty revenue invested into affordable housing.

The state government said it remained committed to delivering its $73.5 million Affordable Housing Strategy in the upcoming state budget.